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Q317
Presentation by Anders Lidbeck
President & CEO
24 October 2017
Agenda
Intro
Financials Q317
Way Forward & Outlook
Intro
REVENUE
501.3MSEK
NO. OF
EMPLOYEES
464
HEAD
QUARTER
KISTA,
SWEDEN
LISTED
NASDAQ
STOCKHOLM
R&D OPEX
INVESTMENT
18PERCENT
OPERATING
MARGIN
23.7PERCENT
A Catalyst for the Connected Society
Our Vision, Mission, and Commitment
Our Commitment
Our commitment is to
work together with the
leading hardware
vendors and our
customers - as a key
contributor in the open
source community - to
develop and harden
optimal software
solutions for tomorrow’s
connected society
Our Mission
We provide the network
software platform and
expert services our
customers need to enable
today’s and tomorrow’s
connected society
Our Vision
Our software and expertise
help you develop
amazing functions in a
connected society
Our Business
Software Products for embedded applications focused
on communication solutions
Operating Systems
Network Operating Systems for NFV
On Device Management
VNF Management
Network Management
Services Orchestration
Proprietary and Open Source
Network Intelligence – DPI
Maintenance, Support, and Product Services
Related to our own product portfolio
For Open Source based solutions
For integrated solutions incl. 3rd party
Stand-alone System and Software Services
Architecture, design, development, test
In-house and or on-site projects
Bridged Services
More than 3 billion people rely on Enea
software every day, to connect a call or use their mobile phone to get online
Customers
8
Financials Q317
Record Operating Profit
38.1 MSEK operating profit excl. non-recurring costs is a new all-time high & a 27 % y-o-y growth
34.1 MSEK operating profit incl. non-recurring costs is a new all-time high & a 15% y-o-y growth
25.9 percent operating margin excl. non-recurring costs is a new all-time high
23.2 percent operating margin incl. non-recurring costs is a new record for Q3
Q317 Q316
Operating profit excl. non-recurring costs, MSEK 38.1 29.9
Operating profit, MSEK 34.1 29.6
Operating margin excl. non-recurring costs, % 25.9 24.8
Operating margin, % 23.2 24.5
Earnings per share, SEK 1.63 1.42
Q317 Q316
Revenue (MSEK) 147.1 120.7
Revenue growth (%) 22 3
Revenue growth (%) (currency adjusted) 23 1
FY16
Revenue (MSEK) 501.3
Revenue growth (%) 4
Revenue growth (%) (currency adjusted) 3
Record Revenue Growth
Highest Q3 revenue since divestment of Nordic Consulting (2011)
13th consecutive quarter of y-o-y revenue growth
Record y-o-y revenue growth number
Europe
In Europe, revenues increased with 14 percent during the quarter
compared with the corresponding quarter last year. World Wide
Software Sales and European services both posted solid y-o-y
growth numbers.
Americas
Revenues increased by 25 percent compared to the corresponding
quarter of last year, although Service revenues decreased
compared to the same period last year. The increase was due to
strong growth in World Wide Software Sales, which more than
doubled y-o-y. The increase occurred in both Network Solutions
and Operating System Solutions.
Asia
During the quarter, revenues increased by 61 percent compared
with the same quarter last year. The increase was attributable to
Software Sales and especially the revenues from operations in
former Qosmos. In addition a significant deal was closed with Enea
OSE, with a manufacturer of 5G base stations.
Strong Software Growth in the US and Asia
Enea OSE selected for 5G radio base
station
▶ October 2, Enea announced that it has been
selected by an Asian tier one telecom equipment
manufacturer (TEM), to deliver its 64-bit Enea
OSE multicore operating system for use in time-
critical functions in a line of 5G radio base
stations
▶ Enea OSE was chosen based on its ability to
combine high throughput with low latency on
multicore processors.
▶ Enea OSE is the most widely deployed
commercial operating system in radio base
stations in the world. It is a robust, high-
performance real-time operating system
optimized for multicore processors in telecom
and networking applications.
Operating System Solutions was the product group
which accounted for the largest share of Enea's
sales with 46 percent of revenues during the
quarter. Sales increased compared to the
corresponding quarter previous year.
Sales in Network Solutions increased significantly
during the quarter with the acquisition of Qosmos.
The group accounted for 29 percent of Enea's total
sales during the quarter and has an increasing
strategic importance for Enea.
Enea's global service sales decreased compared
with the same quarter last year, accounting for 24
percent of Enea's total sales, due to another weak
quarter in US service operations.
Improved Product Revenue Mix
WW Software grew 123% y-o-y in Q3 (growth in both OS System Solutions & Network Solutions
Key Accounts grew 4% y-o-y in Q3 (due to the acquisition of Qosmos)
Signs of Improvement in US Services
Revenues from Global Services stabilized during Q317
and increased with 12% over Q217
European operations continued to post solid y-o-y
growth numbers
US operations have improved compared with the
previous quarter, but the decline y-o-y is still
significant and the overall decline in Global Services is
still all attributable to the US
Overall Global Services revenues declined with 13% in
Q317 over Q316
Overall Global Services revenues are expected to
further stabilize in Q417 and also to return to y-o-y
growth
Change in Q317 Revenue Mix
16
WW Software grew 123% y-o-y in Q3 (growth in both OS System Solutions & Network Solutions
Key Accounts grew 4% y-o-y in Q3 (due to the acquisition of Qosmos)
4YCAGR: Key Accounts -1%. WW Software +44%, Global Services +9%
Financial Position
Q317 cash flow from operations 30.3 (20.7) MSEK
Q317 cash flow before change in working capital
36.9 (29.0) MSEK
Cash, cash equivalents and financial investments at
the end of the quarter were 265.5 (215.8) MSEK
Total interest-bearing liabilities at the end of the
quarter amounted to MSEK 116.0 (0)
Net cash position 46.4 MSEK (215.8)
vs. -124.9 at year-end 2016
The equity ratio is 59.4 (76.0) percent
Way Forward & Outlook
Way Forward
One should not expect the record margins to be
sustainable during the coming quarters.
Our market is changing and we continue our
efforts to adapt. Acquisitions that strengthens our
market position and long-term earning capacity is
an important part of this transition.
Our objective from the beginning of this year, to
return to above 20 percent operating margins by
year end, still stands.
We will continue to work on stabilizing and
improving operating margins – and profits – by
focusing our business on areas of strength &
market growth.
We continue our efforts to build a bigger and
stronger company, delivering an increasing value
for customers, employees and shareholders.
A Quickly
Expanding Portfolio
Network Monitoring
Cyber Security
NFV Platforms
Virtual ProbesNetwork Management Systems
On-Device Management Agents
3 new areas in the last 2 years
▶ September 7, Enea announced a new milestone in
network intelligence: Qosmos ixEngine®, the
company’s IP classification and metadata extraction
engine, now recognizes over 3,000 protocols, more
than any other Deep Packet Inspection (DPI) library
on the market.
▶ “Qosmos ixEngine is the preferred software for IP
classification and metadata extraction among
networking and security vendors,” said Thibaut
Bechetoille, President, Qosmos Division of Enea.
“This new record in protocol recognition reaffirms
our leadership and reflects our technical expertise.”
Enea announces new milestone
in network intelligence
Cavium and Enea deliver optimized
software and hardware platform for
uCPE
▶ September 11, Cavium and Enea
announced availability of optimized uCPE
solutions based on Cavium OCTEON TX™
ARMv8 processor SoC families and Enea®
NFV Access software platform.
▶ Using universal customer premises
equipment (uCPE), service providers offer
their enterprise customers on-demand
deployment with flexibility of choosing
from a range of virtualized network
appliances in terms of specific virtual
network functions (VNF) and VNF
vendors.
Enea presents latest range of
NFV software solutions at
SDN NFV world congress
▶ October 5, Enea announced they will
demonstrate NFV Infrastructure software for
vCPE, NFV management and service chaining for
virtualized infrastructures at the SDN NFV World
Congress in the Hague, October 9-13.
▶ Enea provides the software foundation for the
next generation of communication services with
a special emphasis on reducing cost and
complexity at the network edge.
Market Outlook 2017
Our objective for the full year 2017 is to
achieve double-digit revenue growth, and
improved operating profit compared to
2016 before non-recurring costs.
THANK YOU
www.enea.com